Mr. Dieu Ba Duoc

Dieu Ba Duoc, head of the Social Insurance Implementation Committee under Viet Nam Social Security said to the Law on Social Insurance, the amendment of the Labour Code played an important role in expanding social insurance coverage, towards universal social insurance, as stated in resolution No 28-NQ/TW on the reform of social insurance policies issued on May 23, 2018.

The amended Labour Code needs to focus on following contents:

Firstly, to sustainably expand the coverage of social insurance, especially compulsory social insurance, the revised Labour Code project needs to make breakthroughs in raising awareness about subjects participating in compulsory social insurance including all citizens involved in labour relations, instead of only those who have labour contracts of more than one month as regulated in the current Labour Code. In reality, labour relations can be set via labour contracts, with or without a written document. If we keep requiring social insurance participants to have labour contracts, not all workers will sign up for social insurance, creating a loophole for employers and employees to avoid signing labour contracts and use other forms of agreements to stop paying social insurance. Thus, it will be impossible to expand the social insurance coverage to all workers.

If the new regulation is applied, there will be 10 million more social insurance participants, increasing the number of people signing up for compulsory social insurance to 25 million nationwide.

The area without labour relations – households for example – have a high number of workers. The labour transition between this area and the area with labour relations takes place continuously, therefore, it is essential to have a specific regulation to ensure benefits of social insurance and health insurance for all workers. Specifically, employees in the non-labour relation area who have stable jobs and incomes, and are fulfilling their tax payment obligations, should be added to compulsory social insurance participation. The social insurance is estimated to cover millions more people.

Secondly, Duoc said it is necessary to have uniform regulations on the lowest and highest contribution rates for social insurance, health insurance and unemployment insurance. At the same time, the minimum wage as a basis for payment of social insurance, health insurance and unemployment insurance must be equal to 70 per cent of the actual income an employee receives from the employer and the highest not exceeding 20 times the regional minimum wage.

Third is retirement age. First of all, be aware that this is a rule about "pension age" not "retirement age", to distinguish the age of employment and not the same age as the pension age. This is entirely in line with international practices.

Viet Nam Social Security has agreed on the plan to increase the age for pension entitlement stated in the project. In addition to the stipulated age for pension entitlement, the project also needs to consider the age limit for social pensions (80 years old according to current regulations). However, the increase in the basic pension entitlement age and the regulation social pension age will require a series of amendments to the provisions of the Law on Social Insurance such as: regulations on reducing the minimum period of social insurance payment for pension entitlement (from 20 years according to the current regulation); the calculation of the percentage of entitlement and pension level on the principle of payment, entitlement, fairness, equality, sharing and sustainability; pension adjustment; regulations on limiting one-off payment; and limiting early retirement./.